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Author Topic: Possible transaction - Any advice?  (Read 1643 times)

Offline WNYBigP

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Possible transaction - Any advice?
« on: May 22, 2010, 02:00:05 pm »
Hello All,

New to the world of REI.   Well, I'm actually not there yet!

Researching my first deal. 

Here's the details:

5 parcels in a City in the Northeast  4 doubles, 1 single.  Somewhat of a distressed area.   60K purchase price.   I have 10K in cash, rest will be loan.
Gross rents are 4800/month. Some Section 8, some "regular." Many long-term (5-10 yr) tenants.  I calculate net positive cash flow of 2500-3000/m after all applicable take-outs.  It looks a little "too good to be true" I know, but all signs point to legitimacy in all the details.  I have visited the properties, talked many times to the landlord, etc. 

Thoughts?  Advice?


Offline REI_Chris

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Re: Possible transaction - Any advice?
« Reply #1 on: May 22, 2010, 05:00:50 pm »
Wow, 5 properties for 60k? This wouldn't happen to be detroit, would it? Ha...

Just make sure you're not buying drug houses in areas where you wouldn't go in the daylight.

Offline justin0419

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Re: Possible transaction - Any advice?
« Reply #2 on: May 23, 2010, 05:51:37 pm »
The gross rent vs purchase price sounds awesome.  Just make sure on something like this that there's not A LOT of deferred maintenance.  Are the units on circuit breakers or fuses?  What kind of plumbing pipe is there?  How are the roofs?  What about HVAC?  Are the floors squishy?  Chris makes a good point about the area.  Don't buy something where you're afraid to go there day or night.
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